Approximately 300 biotechnology, pharmaceutical, equipment, biofuels and medical device companies are based in Virginia, mainly clustered around universities in Blacksburg, Charlottesville, Richmond, Norfolk and Northern Virginia. This blog is an informal diary of what is going on with the industry in Virginia. Opinions here are those of the posters and not necessarily shared by Virginia Bio.

When the New York Times broke the story last week that Eli Lilly & Co. was in confidential settlement talks with the government, angry calls flew behind the scenes as the drug giant's executives accused federal officials of leaking the information.

As the company's lawyers began turning over rocks closer to home, however, they discovered what could be called A Nightmare on Email Street, a pharmaceutical consultant told Portfolio.com. One of its outside lawyers at Philadelphia-based Pepper Hamilton had mistakenly emailed confidential information on the talks to Times reporter Alex Berenson instead of Bradford Berenson, her co-counsel at Sidley Austin.

With the negotiations over alleged marketing improprieties reaching a mind-boggling sum of $1 billion, Eli Lilly had every reason to want to keep the talks under wraps. It was paying the two fancy law firms a small fortune to negotiate deftly and quietly.

If and when it did settle the allegations that it had improperly marketed its most profitable drug, Zyprexa, for schizophrenia, it would certainly want to announce the news on terms carefully negotiated with the government.

"We usually try to brace for that [kind of] story," a Lilly staffer said.

So when the Times' Berenson began calling around for comment, and seemed to possess remarkably detailed inside information about the negotiations, Lilly executives were certain the source of the leak was the government.

As it turned out, one of Eli Lilly's lawyers at Pepper Hamilton in Philadelphia wanted to email Sidley Austin's Berenson, about the negotiations. But apparently, the name that popped up from her email correspondents was the wrong Berenson.

Alex Berenson logged on to find an internal "very comprehensive document" about the negotiations, the consultant said, and on January 30, Berenson's article, "Lilly in Settlement Talks With U.S." appeared on the Times' website. A similar article followed the next day on the front page of the New York Times.

Those who knew the real story must have had a chuckle—or shed some tears—over Lilly's statement to the Times that it had "no intention of sharing those discussions [with the government] with the news media and it would be speculative and irresponsible for anyone to do so."